Correlation Between PSQ Holdings and Austral Gold

Can any of the company-specific risk be diversified away by investing in both PSQ Holdings and Austral Gold at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining PSQ Holdings and Austral Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PSQ Holdings and Austral Gold Limited, you can compare the effects of market volatilities on PSQ Holdings and Austral Gold and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in PSQ Holdings with a short position of Austral Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of PSQ Holdings and Austral Gold.

Diversification Opportunities for PSQ Holdings and Austral Gold

-0.15

Correlation Coefficient

PSQ Holdings  Austral Gold

Good diversification

The 3 months correlation between PSQ and Austral is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding PSQ Holdings and Austral Gold Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austral Gold Limited and PSQ Holdings is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on PSQ Holdings are associated (or correlated) with Austral Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austral Gold Limited has no effect on the direction of PSQ Holdings i.e., PSQ Holdings and Austral Gold go up and down completely randomly.

Pair Corralation between PSQ Holdings and Austral Gold

Given the investment horizon of 90 days PSQ Holdings is expected to generate 1.27 times more return on investment than Austral Gold. However, PSQ Holdings is 1.27 times more volatile than Austral Gold Limited. It trades about 0.1 of its potential returns per unit of risk. Austral Gold Limited is currently generating about 0.09 per unit of risk. If you would invest  246.00  in PSQ Holdings on September 28, 2024 and sell it today you would earn a total of  218.00  from holding PSQ Holdings or generate 88.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

PSQ Holdings  vs.  Austral Gold Limited

PSQ Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PSQ Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, PSQ Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Austral Gold Limited

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Austral Gold Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating fundamental indicators, Austral Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PSQ Holdings and Austral Gold

The main advantage of trading using opposite PSQ Holdings and Austral Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PSQ Holdings position performs unexpectedly, Austral Gold can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Austral Gold will offset losses from the drop in Austral Gold's long position.

The idea behind PSQ Holdings and Austral Gold Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.